Current ratio

Debt and balance sheet

Current assets against the liabilities due within a year.

How it is worked out

Current assets divided by current liabilities.

How to read it

  • Above 1 means what turns into cash within the year covers what falls due. Businesses paid on the spot (retail, restaurants) run comfortably below 1.

Example

Current assets $3bn, current liabilities $2bn: 1.5.

Related terms

Related pages

The other pages on US stocks, free to read. On the company pages, the last three fiscal years are open to everyone, five with a free account, and every year with Ploutos Investor.

US stocksThe market today, the sectors, the largest companies and the week's results.The market's sectorsThe 11 sectors side by side: returns, share of the market, median P/E and dividend.Compare stocksTwo companies side by side: price over up to ten years, with and without dividends, and every figure.US dividend stocksEach dividend's yield next to whether the company's cash covers it and whether it was ever cut.

Explanations of terms for learning, with examples from SEC filings.